CHAPTER 1
Market Understanding
Territory planning, the focus of chapters 1 through 4 is the process of collecting and analyzing appropriate data and the building of practical strategies based on that data to maximize the likelihood of success.
Effective territory planning is the bedrock upon which the successful achievement of personal and organizational enterprise selling goals is built. This kind of planning focuses broadly on accounts within a given territory and on the identification of the product or service with the value most relevant to them.
“Which are the most promising, most likely prospects for our organization’s products and services?” Exploring this question closely and continually drives the best possible return on investment. Good enterprise territory plans are living tools. They are not documentation that sits in a binder on a shelf. They must be reviewed and amended moving forward, based on the dynamic conditions in the marketplace.
A True Story
A family-run regional office equipment distributor—let’s call the company Copy Top—hired a new VP of sales. We’ll call her Jeri Lane. Jeri was to replace one of the firm’s three founding brothers, who was retiring.
Up to this point, the Copy Top sales force had not followed any formal account planning process. Brainstorming sessions were conducted annually for each account generating more than $200,000 in annual business. These sessions included sales management and all the members of the sales team, and the results were typically the same after each session: make more calls, do more cross-selling, target decision makers who are higher in the organization, and so on.
Jeri faced some challenges. In recent years, Copy Top’s client-retention numbers had slipped, and accounts generating $200,000 in revenues were vanishing. These larger accounts had provided 75 percent of company revenues eight years before, but now provided only 52 percent. The trend line was ominous. Jeri rightly saw this as a huge issue and led an effort to inject active account planning for the 20 top-revenue-generating Copy Top clients.
After doing a little digging, Jeri found there was a profound lack of understanding about these critical clients’ business objectives. Just as troubling, there was a pervasive disconnect between the sales and service teams. She brought the two teams together for a series of special account planning sessions and included people from other key functional areas of the firm, such as accounting and marketing.
These meetings helped to build an organizational understanding of the clients and their businesses and led to the development of a health-care-focused division to serve this particular vertical, which (Jeri pointed out) provided 46 percentof Copy Top’s total revenues. The account planning discussions also included a key focus on Copy Top competitors and, through feedback from the service team, it was recognized that one competitor was relentlessly targeting Copy Top’s large clients—and winning their business.
Jeri implemented a defensive strategy that focused on a new client satisfaction process. Within 12 months, the competitive challenge was thwarted. Jeri also convinced HR to amend the sales and service compensation structures to provide similarly designed bonuses for client retention and account growth. Within two years of her taking the job, client retention of Copy Top’s 20 most important accounts stood at 95 percent—and overall revenues from accounts generating $200,000 or more now contributed 74 percent of the firm’s revenues. Account planning had turned things around!
Know Your Surroundings
Some organizations execute the market planning piece really well. Others don’t spend enough time on it and, as a result, take off without solid footing.
In the world of enterprise selling, you have to generate market understanding before you do anything else. It’s not a “nice-to-have” asset. It’s mandatory!
There are six key areas to build market understanding: account base, economy, service structure and deployment, market patterns, competition, and affiliations/alliances. While there may be others, these six are critical. The listing below breaks down the specific inquiry points connected to each area. How many of these bullet points sound familiar to you?
Account Base
• Likely vertical focus
• Typical company size
• Common pains
• Typical sales-cycle length
• Revenue potential
• Competitive positions
• Commercial vs. public sector
Economy
• Market cycles
• Seasonal buying patterns
• Regional influences
• Growth
• Vertical impacts
• Governmental issues
• Environmental issues
Service Structure and Deployment
• Direct/remote
• Internal/outsourced
• Product/service based
• Team selling focus
• Alliance/channel partners
• Industry specialization
• Practice/specialty groups
• Organizational support
Market Patterns
• Demographics
• Buying access
• Brand image
• Ethical issues
• Cultural issues
Competition
• Footprint
• Customer view/acceptance
• Growth pattern
• Sales/marketing strategy
• Pricing model
• Distribution methods
• Territory value propositions
Affiliations/Alliances
• Industry/trade associations
• Local colleges and universities
• Current clients from other territories
• Current alliance partners
• Current prime/sub-partners
• Chambers of commerce
• Company alumni/friends
• Other affiliations/alliances
During SES training, participants are asked to pinpoint all of the above, being as specific as possible, and then to identify the one topic with the biggest impact on their business in each of the six categories. Why not do it now before you move on to the next chapter?